Question
A company sells steel water bottles for $30 each and has the following costs to produce them: break even The company has 3 factory managers
A company sells steel water bottles for $30 each and has the following costs to produce them: break even The company has 3 factory managers that each make $40,000 per year in salary, however one of them is paid a bonus based on the number of bottles that are produced of $3 per water bottle. Required (10 Marks) Calculate the following items for the company: a) The breakeven point in both number of units and sales dollars b) How many units would the company need to sell if they have a target net income of $220,000? c) The company is considering entering into a maintenance contract with the following mixed costs that are calculated based on the number of units they are planning to produce each month next year. Calculate the variable component and the fixed component of this mixed cost: mixed costs
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